Bitcoin's potential for a significant rise, termed a 'melt-up', is currently under discussion by Matt Hougan, the Chief Investment Officer at Bitwise. He indicates that three main factors will influence Bitcoin's chance to exceed $80,000 this quarter: the outcome of the U.S. elections, the state of the economy, and the stability of the crypto industry.
At the end of 2023, Bitwise predicted that Bitcoin could double from $42,400 to over $80,000, driven by anticipated approvals for spot Bitcoin exchange-traded funds in the U.S. and Bitcoin’s forthcoming halving event.
Regarding the economy, Hougan suggested the need for two rate cuts totaling 50 basis points by year-end and additional fiscal stimulus from China to support a Bitcoin rally. He emphasized that trust in government handling of money drives interest in Bitcoin.
Lastly, Hougan stated that for Bitcoin to trade above $80,000, the crypto industry must remain free from major surprises, including hacks or sudden market influxes of previously locked coins.
Despite current challenges, Hougan believes that a broader crypto rally could bolster Bitcoin's prospects. While Bitcoin doesn't require other cryptocurrencies for long-term success, a significant market sentiment shift towards pro-crypto could lead to a rapid rise to $100,000.
As of now, Bitcoin has shown resilience, with a 47.5% increase this year, highlighting its potential trajectory towards $80,000 and beyond in 2025.
